Jim Stengel, former CMO of Proctor & Gamble, opened his talk with this evaluation of consumer shopping behavior:
"This is more than a correction... this is a fundamental shift."
Some statistics:
- 90% of shoppers are telling us that they are making long term shifts in their behavior. It's not a weather change, it's a climate change.
- Private label is growing at 2x rate of national brand
- 82% of every UK shopping trip has a private label product ON THE LIST
- Coupon usage is up 43% around the world
Jim outlined what he called the "Five Ripples of Opportunity:
1. Stand for something that matters
Reflect what is important to the shoppers you serve in everything you do.
Darty (French retailer, appliances and electronics): They stand for incredible trust, the trust you would have in a family member. Growing at 10% in last quarter.
Marks & Spencer: "Plan A: because there is no plan B": Were not known prior to 2007 as being particularly green. They unveiled "Plan A" in 2007 and is now one of the most admired green company in the UK. They invite the consumer to be involved, making commitments to embrace sustainability, fair trade, etc. (BRILLIANT: their reusable shopping bag only costs 10p and is guaranteed with replacement for life if it wears out) Last quarterly numbers, sales up 2%.
2. Play a role in consumers' lives
El Palacio de Hierro (Mexican): Has taken women's thoughts and feelings about the shopping experience to a new level. They've abandoned the cliches about the relationship between woman and her family in favor of femininity. From a print ad: "One phrase separates a girl from a woman: I have nothing to wear." Absolutely gorgeous television ad with shoes "There are two things a woman cannot avoid: cry and buy shoes." Last quarter result, up 5%.
3. Focus on ownership not purchase
Apple: Genius bar in stores allows customers to engage with one another as well as with Apple staff... it raises competency of the consumer, which drives satisfaction and increases penetration and loyalty. Focusing on what happens when you OWN the product, and creating advocates and zealots in them.
4. Cultivate smart and savvy shoppers
Ann Taylor Loft (US): Recognized early that consumers are spending less on apparel and the era of "disposable" clothing is over. Women need help creating new outfits with the investment clothes they have, so they partnered with Tide Totalcare to educate consumers on how to take care of your clothing.
5. Create joint value for retailers & brands
Suppliers dominated during the 80s and 90s, with pre-eminent global and national brands. Then in the early 2000s, retailers began to dominate with rationalizing their SKUs and major private label brand investment and penetration. Going forward, shoppers will dominate.`
"if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. In practice, however, you often pay a size premium by buying the larger quantity. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain."
Posted by: ErgoBaby Performance | 23 January 2011 at 06:30 AM